FAS compared to PEO

Steve Pruneau

Sometimes we are asked if Free Agent Source is a Professional Employer Organization (PEO).  Answer: Definitely not.

But it’s a reasonable question.  The goals that lead business owners and entrepreneurs to a PEO, lead them to an even better solution in Free Agent Source.  Those goals are usually summed up by “How can I avoid all administrative tasks related to employment?” Free Agent Source solves that problem.

A Google search of “PEO client responsibilities” will return many general descriptions that will help you understand what a PEO is and what it does.

The table below explains how Free Agent Source is different from a Professional Employer Organization.

FAS compared to PEOs

Just-In-Time TalentFAS makes it possible for businesses to hire independent professionals, without the heavy burden of personnel administration which all employers incur. Businesses who engage our contractors avoid personnel administration because they are not the employer.PEOs do not help businesses hire independent professionals to augment operations. PEOs are primarily in the business of HR outsource services and HR consulting.  Engaging a PEO does not eliminate litigation and regulatory risks related to employment.

Free Agent Source Professional Employer Organizations
Who is the emloyer? Free Agent Source is the employer. Anyone who engages a contractor from Free Agent Source is the client. Not clear. PEOs offer a “co-employment” solution which makes both parties accountable. Requires a detailed contract that describes responsibilities of each party.
Fees No fee.  Clients simply pay the billable rate agreed with the contractor. Cost of operating Free Agent Source is covered by revenue which each contractor (Free Agent) earns. These costs are minimal because all we do is handle business administration – we provide the business through which Free Agents can work. PEOs charge fees directly to clients.  In addition to those fees, clients also have some obligations and administrative duties as an employer.
Insurance FAS is fully insured. Clients are not required to purchase insurance to cover FAS employees and their activities. PEOs often require the client to purchase Workers’ Compensation insurance, General Liability insurance, Employment Practices Liability insurance and provide a COBRA solution.
Contract FAS service agreement is clear, standard and quick to complete. You can start today. PEOs – Nothing standard. Usually requires consultation and review of your business by an advisor from the PEO. After they understand your business, there will be a subsequent negotiation of contract terms and shared responsibilities.
Contract Termination Cancel service with any FAS contractor at will, without a minimum term. As a professional courtesy, we do ask for advance warning of any known end to the assignment. PEOs have minimum terms and minimum fees. Terminating the business relationship is usually not a simple matter and usually cannot be done quickly.
Health Insurance and 401(k) plan FAS offers health insurance and 401(k) retirement savings to all employees. PEOs may not provide a health insurance or a 401k plan. It depends on the PEO and the agreement with each client. At minimum, the PEO will likely impose some obligations on the client company related to medical insurance and the 401k plan.

 

Steve Pruneau leads executives and business owners to solve the gap between variable revenue and a fixed workforce. He is the first consultant at Free Agent Source. As a founder, Steve engages the broader community of corporate clients, entrepreneurs, startups and consultants. He manages company operations and lives in Los Angeles, CA.

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